The Impact of Dividend Policy on Stock Price Volatility: A Case Study of Selected Firms from Textile Industry in Pakistan

Abstract

The study aims at investigating the relationship between dividend payout and the stock price of listed companies in Karachi Stock Exchange and to establish the extent of the relationship between them. The data were collected from Karachi Stock Exchange from 2003 to 2008. Five firms from textile industry were selected purposively. Stock price was dependent variable while the independent variable was dividend payout ratio. The size of firm, earning volatility and growth were selected as controlled variables. Multiple regression model was employed to explore the relationship of dependent with independent variables. Results showed that overall models were good fit showed by coefficient of determination values. Dividend payout ratio was significantly affecting the stock price. Other variables sowed mixed results in some models were found significant.

Pengaruh Kebijakan Dividen, Nilai Tukar, Leverage, dan Firm Size terhadap Volatilitas Harga Saham

“…Menurut (Anastassia dan Firnanti, 2014) pergerakan naik atau turunnya harga saham di Bursa Efek Indonesia merupakan volatilitas harga saham. (Ullah et al 2015) menyatakan bahwa volatilitas harga saham merupakan tolok ukur untuk menentukan risiko dari suatu saham. Semakin tinggi volatilitas harga saham, maka semakin besar kemungkinan harga saham naik dan turun secara cepat (Priana dan Muliartha, 2017).…”

Influence of dividend policy on sharia stock price volatility

“…In Pakistan, dividend policy study has been conducted by some researchers (Abrar-ul-haq et al, 2015;Shah, Noreen & Umara, 2018;Ul-haq et al, 2015) who examined the influence of dividend policy on stock price volatility using stratified sampling and time series data in 2001-2014 to all companies registered in Karachi Stock Exchange (KSE) Pakistan, and it showed an evidence that dividend policy has no influence on stock price volatility. Ullah et al (2015), with the sample of textile company in Pakistan Stock Exchange, proved that only dividend payout ratio that has significant correlation with stock price volatility. Shah and Noreen (2018) examined the correlation of dividend policy using 50 samples of non-financial sector company in 205-2012 period of research in Karachi Stock Exchange (KSE).…”

Specific Determinants of Share Prices: A Case Study of Listed Life Insurance Companies in Nepal Stock Exchange

“…The relation of DPS with the market price of shares was found to be insignificant. Ullah et al (2015) had studied if the dividend policies had impact on the market share price of the textile companies listed in Karachi Stock Exchange. The study used regression analysis with data from 2003 to 2008 and revealed that the dividend payout ratio was significantly affecting the share prices.…”